The U.S. Defense Logistics Agency (DLA) is seeking to buy scandium oxide worth up to $40 million over the next five years from a unit of mining giant Rio Tinto. This initiative aims to secure supplies of the critical material for addition to the national stockpile. The DLA intends to purchase 6.4 metric tons of scandium oxide within five years.
Scandium is one of the rare earth elements, vital for Western defense and technology sectors, and its importance has been highlighted by China's export controls. This potential government contract underscores the strategic value of scandium and Rio Tinto's role as a potential supplier. It positions Rio Tinto as a key player in critical mineral supply chains.
This development represents a significant potential customer win for Rio Tinto's critical minerals business. Securing a long-term supply agreement with a government agency would provide stable demand and revenue for its scandium production. It aligns with the broader geopolitical push for critical mineral independence and diversification of supply sources.
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